May 7th, 2024, Newsletter

Dear Friends,

Tangents:
On May 7, 1945, Germany signed an unconditional surrender at Allied headquarters in Rheims, France, to take effect the following day, ending the European conflict of World War II. Go to article >>
1955: West European Union formed.
May 7, 2000: Vladimir Putin becomes President of Russia.

1824: Premiere of Beethoven’s Ninth Symphony.

Pyotr Tchaikovsky, composer, b. 1840.
Gary Cooper, actor, b. 1901.
Eva Peron, Argentina’s “Evita”, b.1919.

Here’s what happened at the Met Gala
The Met Gala, an annual, invitation-only event, was held Monday in New York City. See photos from one of fashion’s biggest nights.

Kremlin critic wins Pulitzer Prize
Vladimir Kara-Murza, a prominent Russian human rights advocate and Kremlin critic, has won the Pulitzer Prize for commentary written from his prison cell.

Siberia’s ‘gateway to the underworld’ is growing a staggering amount each year
The Batagay megaslump — a 3,250-foot-wide (990 meters) depression in the permafrost in the Russian Far East — is “actively growing” by a massive amount every year, scientists have found. Read More.

Iron Age necropolis that predates Rome unearthed near Naples
The excavations have recovered weapons, necklaces, bracelets and worked bones. Read More.

Earth from space: Mysterious wave ripples across ‘galaxy’ of icebergs in Arctic fjord
A puzzling arc was spotted in the water of a Greenland fjord littered with iceberg fragments. There are a couple of possible explanations for this bizarre phenomenon but we will likely never know what caused it,
experts say. Read More.

Mars may have been more Earth-like than we thought, discovery of oxygen-rich rocks reveals
Newfound rocks on Mars suggest the planet may have once sported an oxygen-rich atmosphere, making it more Earth-like and hospitable to life than previously thought. Read More.

‘Major lunar standstill’ may reveal if Stonehenge is aligned with the moon
Is Stonehenge aligned with the moon? Scientists hope to find out during a rare “major lunar standstill,” which happens once every 18.6 years. Read More.

PHOTOS OF THE DAY

Wehrheim, Germany
A deer stands in deep grass near Frankfurt
Photograph: Michael Probst/AP

Stroud, UK
The Miserden Morris dancing group perform at sunrise on Rodborough Common as part of the May Day celebrations
Photograph: Ben Stansall/AFP/Getty

​​​​​​​Hastings, UK
Participants attend the annual May Day bank holiday Jack In The Green parade and festival in East Sussex
Photograph: Toby Melville/Reuters
Market Closes for May 7^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1825, one of the earliest buying frenzies for an American IPO was reported when the Bank of Southwark went public in Philadelphia. Investors hired muscular goons to sign their names into the subscription books, and “noses were smashed, hats jammed in, and the police court was at work over the wounded for weeks after.”
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the fifth day, climbing 0.1%, or 31.15 to 22,290.62 in Toronto.
The index advanced to the highest closing level since April 9.
Toronto-Dominion Bank contributed the most to the index gain, increasing 1.1%.
Finning International Inc. had the largest increase, rising 3.5%.
Today, 104 of 223 shares rose, while 111 fell; 4 of 11 sectors were higher, led by energy stocks.
Insights
* The index advanced 8.5% in the past 52 weeks. The MSCI AC Americas Index gained 25% in the same period
* The S&P/TSX Composite is 0.4% below its 52-week high on April 9, 2024 and 19.3% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 2.7% in the past 5 days and was little changed in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.6 on a trailing basis and 15.1 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.53t
* 30-day price volatility fell to 9.78% compared with 9.79% in the previous session and the average of 8.30% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | 26.4163| 0.6| 25/12
Materials | 23.2820| 0.9| 36/13
Information Technology | 1.0468| 0.1| 5/5
Communication Services | 0.1890| 0.0| 4/1
Utilities | -0.4031| 0.0| 4/10
Consumer Discretionary | -0.7620| -0.1| 6/7
Health Care | -0.7785| -1.2| 0/4
Real Estate | -3.3788| -0.7| 4/16
Financials | -3.4011| -0.1| 8/18
Consumer Staples | -4.9737| -0.6| 2/9
Industrials | -6.0830| -0.2| 10/16
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
TD Bank | 10.4300| 1.1| 6.5| -11.3
Canadian Natural Resources | 7.7310| 1.0| -41.4| 20.8
Nutrien | 6.9880| 2.7| -11.8| 1.6
WSP Global | -3.8200| -2.0| 16.5| 15.5
Bank of Montreal | -4.3630| -0.7| 16.7| -3.7
RBC | -4.8220| -0.4| 9.8| 3.5
US
By Rita Nazareth
(Bloomberg) — The rally that has powered stocks in May struggled gain much traction on Tuesday, with investors split on whether the market can sustain the advance given all the economic crosscurrents.
Equities are set for a consolidation amid stretched positioning, according to JPMorgan Chase & Co. strategists.
Meantime, a pair of contrarian sentiment indicators from Bank of America Corp. and Citigroup Inc. are on the cusp of levels that say it’s time to snap up shares.
And Goldman Sachs Group Inc. said Commodity Trading Advisors have lifted their stock exposure and are expected to keep buying regardless of the market direction this week.
Stocks have been trying to make a comeback after April’s rout, with gains fueled by prospects of Federal Reserve rate cuts and solid earnings.
While the S&P 500 recently broke above a key technical level, Matt Maley at Miller Tabak + Co. says he’d like to see a bit more upside follow-through to confirm the “break.”
“We continue to see a path higher for stock prices as long as fundamental conditions remain stable and profit growth remains on a positive trend,” said Anthony Saglimbene at Ameriprise.
“Elevated interest rates and sticky inflation, along with the Fed holding monetary policy at restrictive levels for longer than most expected at the start of the year, introduce some added risks.”
The S&P 500 briefly hit 5,200.
Peloton Interactive Inc. soared as CNBC reported that a number of private-equity firms are mulling a buyout.
Walt Disney Co. sank on a weak subscriber outlook.
Apple Inc. saw a small gain after unveiling a new artificial intelligence-focused iPad Pro and a larger iPad Air.
Treasury 10-year yields fell three basis points to 4.45%.
A $58 billion sale of three-year notes garnered solid demand.
This week’s offerings also include $42 billion of 10-year notes Wednesday and $25 billion of 30-year bonds Thursday.
Despite resilient consumption and artificial-intelligence optimism, US economic growth slid last quarter while inflation stayed high.
Fed Bank of Minneapolis President Neel Kashkari said Tuesday it’s likely the central bank will keep rates where they are “for an extended period of time” until officials are certain prices are on track to their target.
Economists at Morgan Stanley changed their forecast for the timing of the Fed’s first cut to September from July because of “lack of progress” on inflation.
US growth momentum is resilient, but likely slowing, and that could weigh on equities, which have decoupled from the Fed by assuming that an acceleration in growth was lying ahead, a JPMorgan team led by Mislav Matejka wrote.
The equity rally “created a complacent technical picture,” with sentiment and positioning indicators still near highs, despite some recent consolidation, they said.
“While internals improved, our breadth indicators remain in confirmed sell signals,” said Craig Johnson at Piper Sandler in a note titled “Not Out of the Woods Yet.”
The biggest buyers of US equities, American companies, are back in the market and ready to drive the next leg of the stock rally, according to Goldman Sachs Group Inc.
About a sixth of the $934 billion in estimated share repurchases this year are expected get executed in May and June, the firm’s tactical specialist Scott Rubner wrote.
All major Bank of America Corp. client groups offloaded US equities last week, quantitative strategists at the firm said Tuesday.
Institutional clients, hedge funds and retail investors sold a net $4.6 billion of US stocks in the five-day period ended Friday, a team led by Jill Carey Hall said in a note.
Meantime, buying options to protect against a stock-market plunge hit the cheapest in nine years this week.
As the CBOE Volatility Index — or VIX, which measures expected swings in equity markets — sank over the past couple weeks, so did an index tracking the implied volatility of VIX options, known as the VVIX.
The VVIX finished Monday’s session just above 73, its lowest closing value since May 2015.
The index advanced Tuesday, while holding well below its one-year average of 89.
“Over the near term, US benchmarks can continue to push back toward their recent 2024 highs,” said Dan Wantrobski at Janney Montgomery Scott.
“However, we do not believe that the signals for further volatility ahead have been canceled/negated at this time — and thus we continue to watch for another potential down-leg in US equities over the coming weeks.” To Solita Marcelli at UBS Global Wealth Management, investors should stay vigilant on a range of economic and geopolitical risks that could send market volatility back up again.
“Investors can mitigate such volatility and keep their portfolios on track by diversifying and balancing across asset classes,” she noted.

Corporate Highlights:
* Palantir Technologies Inc. tumbled as the market appeared unimpressed by the company’s outlook for annual sales after the stock has tripled in the past year.
* Instacart is partnering with Uber Technologies Inc. to offer restaurant delivery through the Instacart app — taking on the top US food delivery app, DoorDash Inc.
* Boeing Co. has been in crisis mode ever since the near-catastrophic accident on a 737 Max 9 in early January — and there’s little sign it’s catching a break anytime soon as the next investigation looms — this time involving the flagship 787 Dreamliner model.
* Spirit AeroSystems Holdings Inc. expects to produce Boeing Co. 737 Max aircraft bodies at a lowered rate for the rest of the year, pressuring its finances as the two companies work to improve quality in their factories.
* Lucid Group Inc. revealed a wider-than-expected loss to start the year as the company contends with production challenges and uneven demand for high-end electric vehicles.
* Microsoft Corp.’s Xbox gaming division will shut down four subsidiaries, including the game studio Arkane Austin, according to an email reviewed by Bloomberg.
* Truist Financial Corp. boosted its revenue forecast for the year after it completed the sale of a majority stake in its insurance-brokerage business.
* UBS Group AG returned to profit after two loss-making quarters, cementing sustained progress in the integration of Credit Suisse after its emergency rescue last year.

Key events this week:
* Toyota earnings, Wednesday
* Germany industrial production, Wednesday
* Fed Governor Lisa Cook speaks, Wednesday
* Bank of Japan issues summary of opinions from April policy meeting, Thursday
* China trade, Thursday
* UK BOE rate decision, Thursday
* US initial jobless claims, Thursday
* UK industrial production, GDP, Friday
* ECB publishes account of April policy meeting, Friday
* BOE Chief Economist Huw Pill speaks, Friday
* US University of Michigan consumer sentiment, Friday
* Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.1% as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average was little changed
* The MSCI World index rose 0.2%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.1% to $1.0756
* The British pound fell 0.4% to $1.2509
* The Japanese yen fell 0.5% to 154.65 per dollar
Cryptocurrencies
* Bitcoin fell 0.4% to $63,018.51
* Ether fell 0.9% to $3,049.32
Bonds
* The yield on 10-year Treasuries declined three basis points to 4.45%
* Germany’s 10-year yield declined five basis points to 2.42%
* Britain’s 10-year yield declined 10 basis points to 4.12%
Commodities
* West Texas Intermediate crude was little changed
* Spot gold fell 0.4% to $2,315.07 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Alexandra Semenova, Carly Wanna, Thyagu Adinarayan and Michael Msika.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Logic will take you from A to B.  Imagination will take you everywhere. -Albert Einstein, 1879-1955.

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Senior Investment Advisor

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
(C): 250.881.0801
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com